Carbon Sequestration

As many nations consider the adoption of carbon capture and sequestration programs, one power plant in Saskatchewan is providing an intriguing, but somewhat concerning, use for sequestered carbon: oil extraction.

Canada has taken a bold step in embracing carbon capture and storage technology (CCS); Saskatchewan’s public electricity provider opened the $1.3 billion renovated Boundary Dam coal-fired power plant. This is the first commercial-scale power plant to use a carbon capture and sequestration system, and will use the captured carbon in a technique known as “enhanced oil recovery.” Enhanced oil recovery (EOR) injects carbon dioxide sequestered from the Boundary Dam power plant into underground geological formations or sells it to oil companies to prime local oil fields. This process helps increase the total productivity of a well.

While the Boundary Dam project is the first commercial-scale power plant to use this process, Canada is not the first country to do so. The United States is currently the world leader in enhanced oil recovery, using about 32 million tons of carbon dioxide for this purpose annually. And while the technology of using carbon for enhanced oil recovery has been used by the oil industry for 40 years, it has only recently used CO2 produced from industrial processes (as opposed to naturally-occurring reservoirs). Enhanced oil recovery using sequestered carbon “has the potential to not only increase the yield of depleted or high viscosity fields but also to sequester carbon dioxide that would normally be released to the atmosphere.” But the likelihood of producers using EOR depends upon the price of oil; EOR is expensive and if oil prices fall below a certain threshold, the incentive to use EOR on the part of oil producers is diminished.

The promise of sequestering carbon dioxide and reducing the damaging effects of producing oil is still enough to entice others to try EOR. Shell’s Quest Project is an initiative similar to Boundary Dam that establishes a system for carbon sequestration for use in enhanced oil recovery, and is expected to be completed in 2015. This project would use this technology to capture, store, and transport carbon emitted during the tar sands production process. Indeed, production from tar sands such as those in Alberta is currently 3 to 4.5 times more carbon-intensive than from conventional sources in the U.S. and Canada. The hope is that integrating captured CO2 into the production cycle of a carbon-producing fuel will establish a more efficient cycle of carbon use.

While the idea of minimizing the potential damages caused by a heavy carbon-emitting process is laudable, the technique has not been proven on a large scale, and there is potential danger in its widespread application. Reusing carbon captured from power plants reduces the amount of carbon that would otherwise be in the atmosphere; however, this carbon is used to produce fossil fuels which, when burned, release carbon. So, to the extent that the captured carbon allows the extraction of fossil fuels that would otherwise be inaccessible, there is no environmental benefit to using carbon in EOR activities. We are just increasing the amount of carbon-heavy fossil fuels that are available, not making a pre-existing process more efficient or environmentally friendly. Thus, the question becomes, how much of the now recoverable fossil fuels would be recoverable without using captured carbon? If the answer is little or none, it is likely that the use of captured carbon in EOR activities has no environmental benefit and may actually be worse for the climate.

Take the Alberta tar sands for example. As the third largest proven oil reserves in the world, the oil production from these tar sands is expected to reach 3.8 million barrels per day by the year 2022. In terms of expected carbon emissions, a life-cycle assessment published by the Congressional Research Service claims that oil from tar sands results in 14% more carbon emissions than conventional oil. Indeed, scientists have claimed that burning all of the tar sand oil in Alberta could contribute to an additional 0.4 degree Celsius temperature rise just from Alberta. Using CCS reduces this carbon impact but if the captured carbon is then used in EOR activities elsewhere the tar sands remains just as dirty.

There are also concerns regarding sequestered carbon leaking out of geological deposits through cracks and fissures, indicating a need for persistent monitoring and ensuring all possible safety precautions are being taken. Additional technological concerns have slowed the deployment of carbon capture technology. This lack of technological development and geological certainty regarding the storage of this carbon presents strong warning signs about potential risks and hazards faced by implementing carbon capture for oil recovery systems on a large scale.

Carbon capture and sequestration is likely to be the topic of many policy discussions in the near future. The ability to use sequestered carbon for oil extraction is an enticing offer for a policymaker, allowing them to take steps that reduce emissions from power plants, but also bolster domestic oil production. However, the drawbacks from this technology are also substantial, with uncertainty regarding whether carbon will leak out of geological deposits, and whether this process may result in a negative overall impact on the environment. The performance and environmental impact of the Boundary Dam power plant project will provide some insight into the use of sequestered carbon for enhanced oil recovery, and will likely serve as a bellwether for the future of this technology.

Brent is an undergraduate student at Carnegie Mellon University, where he is pursuing a B.S. in Economics with an additional major in Environmental Policy. In addition to his studies, Brent has conducted quantitative environmental research at Carnegie Mellon and works as a consultant for the National Academy of Sciences. Brent’s interests are in the use of economic incentive structures to encourage more sustainable decision-making.